The crypto market should brace for increased volatility as Bitcoin (BTC) and Ethereum (ETH) options contracts worth $9.4 billion and $1.3 billion, respectively, are set to expire on Friday, November 29, 2024, at 08:00 UTC on the Deribit exchange.
According to Deribit data, 45% of Bitcoin’s expiring options ($4.2 billion) are in-the-money (ITM), with 80% being call options. Most of these ITM options are call contracts, meaning their strike prices are below Bitcoin’s current trading price of $98,000. This gives option holders a chance to lock in significant profits.
On the flip side, $5.2 billion (55%) of the options are out-of-the-money (OTM), with $4.1 billion (98%) is in OTM puts—contracts that would profit if prices drop. These OTM puts are largely hedges against downside risk and are unlikely to have much impact.
Meanwhile, Market data suggests that the max pain price—the level where option sellers face the least payouts— $78,000, far below Bitcoin’s current price.
“As far as the expiry on Friday is concerned you see most of open interest concentrated in calls around $82,000 strike and $70,000 strike in puts. Max pain theory would suggest that we would move towards this range between $70,000 – $82,000 but this seems to be relatively unlikely.” He said.
Historically, these monthly expiries have led to notable price swings. In October, for example, Bitcoin’s price dropped 3% as $4 billion in options expired.
However, with Bitcoin nearing the critical $100,000 mark, market makers might buy more BTC to hedge their positions, potentially fueling another rally.
